Sid: Me as the leader, I've gotta identify what are the areas that are
gonna make the biggest differences, and how do I keep people focused on that?
Then also, how do I line them up with what's in it for them, the
company, and all of our futures.
Welcome everyone to another episode of the Overlap podcast where we dive into
the intersections of work, fitness, family, faith, parenting, and leadership.
And here we believe that growth in one area of your life fuels
growth in all areas of your life.
And that's why we're committed to taking the lessons we've learned
from business, breaking them down into simple, actionable insights and
empowering small business leaders And.
You know, everyone else to thrive.
Um, that's really our mission here.
So, uh, we appreciate you guys listening and, uh, thanks for tuning
in today or tonight or whatever the time is, whenever you are listening.
And, uh, here we go.
How you been, Keith?
Very good.
How are you man?
I'm doing great.
Been, uh, been super busy lately.
I know you have too.
So, uh, before I get into me, what, what have you been up to?
Speaker 2: Oh man, we've been, um, I. I'm doing a lot with family
and, uh, hatch had a big event, event last night with, uh, yeah.
Let, let's start with family.
Hold on.
Let's
Sid: go back to family.
Yeah.
What, what, what are you doing there?
Parents?
Oh, yes.
So you've had a lot going on.
I had lot going
Speaker 2: on with parents and I was telling someone just
last week I was, I was like.
You know, and I you've been through this as well.
Yeah.
Uh, parents aging is a hard thing.
Sid: Yeah, man.
And then, uh, I sort of always remember my dad at like 45 to 50 and, uh, yeah.
It just, yeah, it didn't stay that way.
Speaker 2: Yeah.
Yeah.
But it's part of life, isn't it?
It is.
It's, and so, uh, so you've, but you've been able to be there for him, been
able to be there, um, did get to.
We traveled a bit.
Yep.
And so that was cool, getting to get out and ski and then, uh,
last week got back and back at it.
Sid: Yeah.
So you said, you were saying before I cut you off that hatch had, uh, a big event.
Tell, tell me about that.
Yeah,
Speaker 2: we did.
Um, we did a biotech event, which sounds way smart for me to be involved.
It does, admittedly.
Uh, I was sitting in a room last night with scientists and doctors and.
Academia thinking, why am I here?
Sid: Yeah.
Speaker 2: But, um, really great event.
Bringing the biotech and, and marine sciences and ag sciences and
all of those folks together, uh, under one roof was kind of cool.
We led a panel and trying to see how we facilitate
a program that benefits them so.
Okay.
That's kind of cool.
So benefits the scientists does.
Yeah.
Okay.
Or, or involves them in creating techno technology out of Ballwin County.
So, you know, that's a pretty cool thing too.
Cool, cool.
And then, uh, about to launch a book with the publishing company
and so all that good stuff, man.
Spring has sprung it.
Spring has sprung.
Yeah.
And, um, so just been, and I hate the term busy.
Yeah.
Because busy a lot of times means not effective.
Oh,
Sid: okay.
Speaker 2: And so I, that's what I'm trying to get better at is, is this
effective, busy or is it just being busy?
Okay.
Because I think we've talked about this before, we have
really easy to just be busy.
Sid: Mm-hmm.
And not productive.
Speaker 2: Yeah.
Right.
Sid: Yeah.
How about you?
So, uh, yeah, we, we, we had some time off.
Keith and I, uh, went with, um, three other guys that were, that were in a
peer group of mine for over 17 years.
Um, we went skiing and, and, and caught up with them.
Keith got to, uh.
Kind of, kind of meet those guys that, that really I grew up with
in business and learned a lot from.
And, uh, and we, we did some skiing.
The weather was okay.
Uh, snow was just okay.
But the company was pretty great.
Um, and we got to spend some time there.
And then Saturday, everyone left and I picked up the,
uh, picked up wife and kids.
On, uh, after spending about three hours at a, uh, Gold's Gym in Montrose,
Colorado, it was a strange experience.
I love the pictures from the Gold Gym.
I was there just going, what is going on?
Did you flex in the mirror?
I did not.
And I didn't grunt or anything.
You didn't, because I don't know that that's allowed.
Maybe that's only Planet Fitness, but it was, it was just a different experience.
I don't know that I've ever been to one of those kind of gyms.
You know what really?
Speaker 2: It didn't take me by surprise, but this is kind
of a plug for a peer group.
But seeing you guys and how your businesses have grown over the
years and how the relationship has formed between you, between all
of you was really great to see.
Yeah, and it's a plug for just being in community.
Sid: Being in community is for sure.
And, and, and, and within that community there's, you know, cliques
is probably, uh, one word for it, but.
But just cohorts is probably a better word, where we were all
about the same age and all of our businesses were about the same age.
And so we really just kind of grew up together.
Um, uh, and that guy Clint, who's been on the podcast, Clint Allison, him and
I started the same, uh, the same year.
Uh, and those other two guys started just two years before us.
So, um.
It was great and, and we really did spend a lot of time together seeing
each other's businesses quite a few times and uh, and talked to each
other a lot over the last 20 years.
And
Speaker 2: the topic that we're talking about today, actually, y'all talked
about quite a bit, is how to incentivize
Sid: Yeah.
Speaker 2: Yeah.
How, how do you incentivize team members?
Right.
And what is fair and what's not, and what's expected, and what's
mandatory and what's extra.
Sid: Yeah.
Speaker 2: You know?
Sid: Yeah.
And, uh, the, the nice thing about a, uh, a peer group or a, you know,
community in general is that you really don't have to go at it alone.
You've got someone that you can, um.
Especially once you've developed some good relationships over the period of
years, you've got some people that you can talk to that know your business,
know your people, know your tendencies, strengths and weaknesses, and they can
give you some real good advice and, and, and, and it takes time to get that.
Uh, so
Speaker 2: yeah, and I really enjoyed it also because it was an immense
amount of knowledge about bourbon.
It does guys really know a lot.
Yeah.
So they're really into it.
And so we had a good
Sid: time, uh, testing that out.
Yeah.
They did not like Keith Mescal because it's, I didn't know
this, but mescal is smokey.
Not all, all
Speaker 2: mescal, but the mescal that I like it is Okay.
I like a pd, like if I'm gonna drink a scotch, I like a PD scotch.
Sid: If
Speaker 2: I
Sid: don't even know what
Speaker 2: PD means mean.
Burnt, burnt, uh, or smokey flavor.
The barrels are burnt.
The smokey, the smokey flavor on the inside the
Sid: barrel is burnt.
Speaker 2: Well in, in mezcal, in, in the difference between
mezcal and tequila is tequila.
The agave is steamed.
Mm-hmm.
And mescal, the agave is roasted under the ground.
Oh.
And so they build a fire under the ground, Uhhuh put the agave
in, and then extract that.
Sid: How do they get out from there?
How do they get the alcohol out of it or the liquid?
The sugars?
Uh, I'm not real sure about that, but I steam Makes sense.
But that's a different, yeah.
So, huh, well, there was all kinds of talk like that in the, uh.
The, uh, in our, uh, our little meetup
Speaker 2: and, uh, well, and I think that's important too about a peer group
is like, not, not, not only did you, do, you only talk about business and
what your business is doing, but you like delve in personal too, so Yeah.
We know each other's kids, man.
Sid: Yeah.
Our kids know each other.
Yeah.
Which is, that's super cool.
My kids love Clint.
They hated, they missed him.
Speaker 2: Well, who wouldn't love?
I know.
He's freaking hilarious.
He's hilarious.
He's
Sid: hilarious.
Yeah.
Speaker 2: Um, I meant the dude, the dude wore blue jeans under his ski pants.
I know.
So he could just.
He just wore his Tennessee hat.
That's right.
Skiing and no
Sid: goggles.
Oh no.
He wore a Flora Bama hat.
Yeah.
Speaker 2: Not a, not a goggle.
Not a goggle.
Yeah.
Just as coast of Del Mars.
Sid: Oh my God.
Yeah.
It was
Speaker 2: awesome.
Sid: Yeah.
So, uh, like Keith said, we're talking today, uh, about when, I
mean really why then, when, and how to implement an incentive program.
Um, this is an area.
Or a topic that gets, I think most people think they, they know the answer to.
It's almost like communication.
Everyone goes, oh yeah, incentive.
Yeah, just incentivize 'em.
And it sounds smart and it sounds, um, like the right thing to do, but isn't
and when is very important in my opinion.
And then, um, you know, why and how.
Those questions are just so more, so much more important than people just
realize and, and I think most people have a flippant kind of attitude
towards developing an incentive program until you actually sit
down and try to come up with one.
I.
Speaker 2: Yeah.
Sid: So, um,
Speaker 2: let me ask you a question.
Okay.
Because I think we need to clarify this before we move into incentive
plans, what they do and how they do it and all that stuff.
When in your company did you decide,
and it can be like a team member number or that you need to incorporate incentives.
Sid: Okay.
Um.
You know, when we were talking about that peer group, um, after I had gotten
in for a couple of years, uh, I had started to iron out some processes.
You know, and then some ways this is the way we do things.
Uh, for the first couple of years it was just me doing it and sort of, you
know, coming out of school you've got an idea of how you're gonna do things.
And I had some other experiences like, uh, you know, being in the Coast Guard
and I had some, some ideas about that.
And I had worked for other landscape.
Companies, and I had some ideas about that.
And, you know, uh, anyone that's ever started a business thinks they're gonna
do it their way and, and maybe use some of the things that, you know, but
I was still experimenting, you know, and, and I didn't really have any.
I certainly didn't have any written processes, but really didn't even
have like some standard processes.
Uh, so after a couple of years we started developing some pretty standard processes.
This is how we do things.
Um, for instance, we, we were really, um, focused for a couple years and dialed it
in that, you know, man hours on each job.
And so that was the first incentive program I ever came up with was like,
Hey, we sell a job, you're on that job.
If we meet these, um, these hours, you know, if we hit, you know, if
it's a hundred hour job and we get it done in a hundred hours, I'll
give you something, like a dollar for each one of the hours, you know?
And if we go under, great, but if we go over, you don't, we
don't get anything, you know?
Um.
And so when, and I mean, sorry.
Why?
Let's start with why, why would you do that?
Why would, why do we want an incentive plan?
I think that's a good question and for me, and, and I want the
listener to hear me out on this.
If we're, if you are a business leader, if you're an owner, you're
the CEO, you're whatever president, you're just the startup founder.
Doesn't matter if you're inviting people to come on the team, what you have to do.
My goal is, is I've gotta go out front and see what is possible and then have an idea
of what margin can be created and then.
Use that margin to share it with the people that are gonna help me get there.
Does that make sense?
It does.
So that's a broad statement to just say, I know at that point in time,
when you ask me, I know that if I can hit the hours on every one of
these, then we're gonna create.
Way more margin, more money.
We're gonna make this amount of money and every time we go over,
we lose some of that margin.
So if I can incentivize and, and we were, I was, we, like I said, I
had a couple of years of trying it out and I could see we were missing
the mark about 25% of the time.
I'll say at least half of that.
So 12.5% was my estimating process.
But the other part was I left the, you know, I left the job unattended to go.
Uh, you know, do another estimate or do some invoicing or see a customer
about something else, whatever.
Right?
And you'd be gone half the day or the day and just wor work didn't get done.
You know, even if you had a right hand guy or girl or whatever.
And so, not
back to the leadership part.
What I have to remind myself, I have to remind myself all the time still is that.
I can get people fired up about things, you know, the team and all of that stuff,
but ultimately to get 'em fired up and, and, and have it be sustainable, they
need to understand what's in it for them.
So an incentive program really starts to put that, um, that talk
or that my money where my mouth is.
And so I was like, Hey, we gotta hit these hours.
We gotta hit these hours.
Oh, by the way, I've created this plan and if we hit these hours, you
know, you get a dollar for every one of the hours that, that, that.
That, that's on the job.
Um, and, and it was just pretty simple math and, and, uh, and it, and it worked.
And what it did was it got everyone rowing in the same direction.
I. It got everyone focused on this is the most important thing.
Well, in at that time.
Um, it got everyone focused on production.
It got everyone focused on, you know, managing their time.
It got everyone focused on, Hey, we want to go ahead and spend an extra
hour or two hours to get that job done.
We might work a little late until six o'clock so we don't have to spend the
extra hours of cleaning up the job site, loading up, driving back to the shop.
Uh, doing whatever you gotta do there.
Clocking out, coming in the next morning, clocking in, loading up
in the truck, driving to the job set site, finishing that up, and
then finally getting off the job.
Now you're five hours over and you lose.
So why is at the basic foundational level is to get everyone focused on what's
most important and leadership is really.
Getting everyone focused on the differences that make the difference.
That's what leadership is.
You gotta have, that's why we say numbers are the language of business.
And if you're gonna run a business, own a business or anything else, you need to
know what that is so you can understand.
I. All the things, right?
You don't understand, understand 'em all, but you need to understand
it's well enough to know these are the most important things.
Now I can focus these guys on this, and that's gonna be different for each
department group or achievable goals.
Clear, pretty much achievable goals,
Speaker 2: and that helps you formulate that incentive formulation of that.
Exactly.
Right.
Sid: Yeah.
Does that answer your question?
It does.
Yes.
That was very long-winded.
I'm sorry.
'cause
Speaker 2: a lot of people say, uh, the incentive is they get to work here.
Mm-hmm.
Well, well I, but I think to That's at a
Sid: very low level.
Yeah.
Speaker 2: Yeah.
But I think to create, to create, you know, excitement
around them coming to work.
Sid: Yeah.
Speaker 2: And giving the, giving your team members a sense of ownership.
You've gotta bring them in the process.
Yeah.
And a lot of times.
I have failed to, to bring the team members into the process and
say, this is where we're going.
I'm just like, go do, do that.
Sid: Right?
Speaker 2: You know, here's the task, go do it.
But.
Giving them some ownership, I think is important.
Sid: 100%.
And the way I like to think about it is, is I, I think most people listening to
the podcast, um, and, and most people I ever talk to about this have, have
had some experience with team sports.
And the leader, the CEO, the president, the manager, whatever is you, you, you
gotta think of yourself as the head coach.
And if I just bark at my players to, you know, block right?
Without explaining the why, and then incentivizing the good behavior.
I'm not, it's not very sustainable for them to do what I need them
to do over a period of time.
Um, it's sort of like your kids, right?
There's some overlaps there.
If all I do is complain to them, I.
About not making the bed.
They're never gonna want to do it.
It not that they're ever gonna want to, right?
But there'll be that, that, that will sort of diminish a little bit.
If you kind of explain the why you, you go ahead and you put your arm around 'em, you
help 'em, and, and you build a little bit of a relationship with them, that's way
more sustainable than just barking at 'em.
And so.
I think that incentive plan or incentives in general are just a tool for me to
bridge the gap and build a relationship and then also put my money where my mouth
is and show them what's in it for them.
Uh, is there an acronym like W Em or something?
What's in it for me?
There's something like that.
Josh De Plan says that all the time.
Speaker 2: Well, that may be text lingo 'cause my kids will send me
like letters on a text and I don't know what that means a lot either.
I'm like, what does this mean?
Yeah.
But, so there was a study, Harvard Business Review did, and they fell, and
this is like in highlights, well-designed incentive plans, increased employee
motivation and productivity by 20 to 30%.
Sid: Yeah.
Speaker 2: But well-designed is the key there.
Sid: Yeah.
Well designed is, is the key.
And, and we're gonna get into that a lot today.
Um.
I'll also say as we, as right as we're getting started, it's
not always money, you know?
Yeah.
Sometimes it's just recognition.
Speaker 2: Well, I think you, I saw a study that Gen Z is more, um, like.
Pat on the back base.
Yeah.
If you can give, if you can give a Gen ZA pat on the back, it's what
it, it's even greater than monetary.
Sid: Yeah.
Their love language is words of affirmation, I'm sure.
Yeah.
They gotta
Speaker 2: feel like they're making a difference.
Sid: Right?
Yeah.
And, um, I think, I think a, a good incentive program is holistic
and sort of covers a lot of that.
Speaker 2: This surprised me also when I saw this, this stat.
Gallup did a poll and in 2023 and 23% of employees feel engaged at work.
Sid: Oof.
That's scary.
Well,
that's, uh, that could be a good thing or a bad thing if
you're competing in the market.
That's a good thing, right?
Because you can, you can be that.
You could be that 20, 26%, you know, you could serve that.
You could be that person that's serving those, you know, those people.
And then the talent from the other places that are not serving them will
eventually make their way to your shop.
Every obstacle's an opportunity, right?
Um, so when.
To implement, uh, an incentive program.
And I alluded to that with my first example is, is when you've got some
systems in place, like this is how you've done, this is how we're going to do it.
Um, and you've done the math on making sure that, one, you're not giving away the
farm, but two, that uh, that it's enough.
A difference to make the difference if you give everyone a dollar in 19.
35 maybe that works, but in 2025, a dollar doesn't move the needle.
Not doing a hundred dollars is okay, but you know, if it's once
a month, a hundred dollars a month isn't, isn't a big enough hit.
And maybe you're not at that point where you can do a thousand dollars a month.
Hell, I don't know that I am either, but especially with all
the people, but the key people, if you can get it to, you know.
A hundred dollars a week or something like that and still only give out
about 10% of that margin, then you're winning, winning, winning.
Um, so when you implement a system is almost, it is as important as why
the system is, is very important.
But here's the one key piece that most people don't consider who
is going to manage that process?
Because if you're going to implement an incentive program and you're the
person that has to sort of, you know, collect the data, crunch the data,
come up with the, uh, the end game consistently at the end of each month,
or the 15th and the 30th, whatever the, the system is, if you're that person
and you don't have the capacity to do so, then you're gonna drop the ball.
And let me tell you what you never want to do.
You wanna lose some trust real quick, start messing up on an incentive program.
Speaker 2: Oh, definitely.
Sid: So people will just say you're a big fat liar.
'cause they think that anyways.
Or don't come through with what's promised or don't come
through with what's promised.
Yeah.
'cause you didn't do the math right.
And hey, we did.
Or you didn't explain it right.
Like, Hey, we don't pay this out until we get paid from the customer.
Well, that's not fair.
I'm like, I don't know why that would be unfair.
I don't have the money until those people pay us.
Uh, so you gotta come up with a system.
You've gotta be at a certain scale that you probably have some
help, help coming, you know, to, like, maybe you got a bookkeeper,
maybe you got an office manager.
Maybe you've got someone that can help.
Or maybe not.
Maybe you're the person, uh, that's implementing it and you're not, you
know, a hundred percent in sales or, or something that's gonna drag you away
from it and keep your eye off the ball.
Uh, if you can do it, that's great.
My hat's off to you, but most of the time I've.
I have needed to delegate that to someone that's going to consistently do it.
That's when it really works.
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Sid: If you're a small business owner looking to take your business
to the next level, listen up.
My good friend Chris Francis, has spent over 20 years growing his tree
care business to national success.
Now he's partnered with Rick Miller.
You've probably heard him here on the podcast before.
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Check out tree business.com or hit the link on the overlap
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Speaker 2: Do you find that individual incentives work or team base?
Sid: I like a little bit of both.
I like a little bit of both.
We have an entire team base incentive program.
We call it a, a self-funded incentive plan, and we have a certain, uh,
dollar amount in our budget every year, and it's, and it's pretty large.
And if we hit the quarterly goal.
For the first quarter, we pay out 10% of that budgeted amount, and it goes
to everyone on the team from, uh, the guy on the front lines swinging a weed
eater to the guy managing, managing director of operations, and they're
all gonna get the exact same amount.
Um, and the first quarter it's a low amount, but we haven't
collected a bunch of money yet.
So it's 10% of what, let's say it's a hundred thousand dollars.
So there's $10,000 to share between, let's say 40 people.
And, and you've gotta qualify for it.
So you have to be there past your first 90 days.
This is just an idea of an incentive plan.
Um, so you have to be there for the first, no, you, you've had to have worked
your full 90 days past your probationary period and worked that whole quarter as
a full fledged, you know, team member.
Uh, you can give some people some exemptions on that.
I don't do it very often, but there might be a guy we hire in as like a, as a, uh,
an account manager and he is got a lot of experience and we're whatever, you
know, we're just getting 'em on there.
But usually there's not any, uh, ex exemptions.
So they've worked that full quarter.
There you go.
And it limits your number.
You know, those people that turn over, they just never get in that pool.
Um, you can miss that first quarter.
Let's say that, say you've gotta have a 10% net profit.
Because we've done the math, we're typically at 8%.
If we can get another 2%, 2% on the net profit of there pays everybody,
you know, it pays for it all.
And then some, right?
And then some is the most important part.
Like you can't give away the whole farm.
'cause if you're owning, you're carrying the risk and you don't know what's
coming around the corner the next month.
So you gotta keep socking away.
Then the second quarter, um, you hit that target.
Let's say it's 10%, whatever.
Um.
At that quarter and you, you didn't hit it in the first quarter.
You can, you can, you'll pay out 30% that point.
'cause it's 10 plus 20.
Or they, you hit the first quarter.
You only hit the you and then you pay out the second quarter.
That's 20% of that a hundred thousand.
Right.
Third quarter would be 30% four.
Fourth quarter would be 40%.
You add it all up, that's a hundred percent.
It's crazy.
Right.
Yeah, but let's say you miss first, second, third quarter, you
can still keep people engaged.
And as a coach I can still say, look guys, we can still win this.
It's my job to do the plan.
How are we gonna win this?
But we can still win this with a Hail Mary at the end of the fourth quarter.
We can get a hundred percent payout on this thing with all of you that
have stuck out the whole, that stuck around the whole year and.
You can get some people fired up about that, but you can also
keep 'em fired up, hitting the, the quarters one after another.
And it's at a frequency, and it's generally since it, since it's, uh,
economical and, and, and, um, equitable if you will, everyone's got the same
amount people can get behind it.
But those folks that are driving each department.
You can come up with a different program for them.
Maybe it's every quarter, maybe it's every month, maybe it's twice a year.
It, it kind of depends on your cycle.
And every business has a cycle.
Uh, quarters work pretty well for us, but maybe they don't
work for some other places.
Um, we've got some highs and lows too.
And uh, you just gotta give it some thought, but when.
Back to that question, when is when you've got some good systems in place,
you've got some record, some track records, you know what success looks
like, and you probably have someone.
To help you implement or, uh, keep track of this, keeping track of it is so hard.
Speaker 2: I think a good place to start though.
Um, and I've done this is a non-cash incentive.
Sid: Okay.
Speaker 2: Yeah.
I love it.
And, and so like travel or mm-hmm.
Give them a night at a hotel.
Yeah.
Or, you know, get them a, uh, Chick-fil-A card.
Sid: Mm-hmm.
Speaker 2: You know, if you do well on a project and can, can afford it.
Start the incentives there.
Yeah.
And then you'll see, because I, I used to do gift cards a lot and Yeah.
I saw like they would look forward to it,
Sid: man.
So you're hitting on one of the things where I was gonna actually circle
back around and say, not everything has to be some well thought out plan.
If all you're trying to do is catch people doing something right.
Right.
That's a different deal.
And, and maybe you can call it incentive plan.
All you're really doing is you might have $200 of, of, of $20 Chick-fil-A gift
cards, you know, and all you're doing is passing those out when you see, uh,
Jimmy did a great job with this customer and the customer called in and said, man.
I just wanted to let you know Jimmy's great you go.
I really appreciate that.
You know what I'm gonna do?
We're gonna tip him for you.
We've got a 20, we've got $20 gift cards that we give out, and uh, we'll
make sure we give him one of those.
And thank you so much for giving us a call and giving us that feedback.
You know what you've done, you've made that customer, I. Uh, know that your,
that their feedback is appreciated.
You, you let that customer know that you appreciate the team member and you've
got a little thing that you're gonna do for 'em and they feel good about it.
And then you go give Jimmy the, uh, the gift card.
You say, man, Ms. Morgan said that you did a fantastic job.
I just wanna say thanks.
Take this, do whatever you want.
Um, $20 cash is pretty good, uh, but whatever you want to do, but it.
The idea behind that is that it's, um, it's not, uh, systemic or system based.
It's more of when I see it, I say it.
Does that make sense?
And I think it keeps people from getting entitled and it makes
it seem a little more genuine.
And if you, and if you spread it around and, and you're really,
uh, you know, thoughtful about it, you're going to keep people.
You know, focused on doing a good job and you're probably building
a lot of bridges and building a lot of relationships that way.
It's infrequent, it's nice.
It doesn't have to be full systemic.
I love it.
Speaker 2: It's really hard.
Early on.
Mm-hmm.
To be, to, to have an incentive plan.
It really is that that is dedicated, that we're gonna do this every time.
Sid: And if you just took out a hundred dollars and you had it
in a cat, like in your, yeah.
Console of your truck or something, and it's all in tens or something, and you
give someone a $10 bill, you know, you just go, Hey, I just wanna let you know
you're doing a great job this week.
Appreciate it, man, that goes such a long way.
And $10 is almost nothing to 'em.
But they appreciate just the thought, the good people, the right
people appreciate the thought.
And if they don't, maybe they're not the right person on the team.
That's, I just gave them a Yeti cup.
Did you?
Yeah, I got one too.
Oh,
Speaker 2: sweet.
I love the small Yetis.
Yeah, it's the perfect size.
Uh, bourbon goes in there.
Did Stephanie
Sid: tell you that?
Speaker 2: Yeah.
She like,
Sid: even Tim's laughing at that one.
Yeah.
He, I mean these are micro Yetis.
Yeah, they are.
Speaker 2: You know, we're on a budget.
Sid: On a budget.
Yeah.
It's genetic.
Speaker 2: Um, no, no.
Everybody gives a big Yeti out.
Yeah.
But Tim Ounce, the 10 ounce don't happen.
And so I gave those.
Sid: Yeah, they're pretty great actually.
I do like 'em.
Hmm.
Yeah,
I was gonna say coffee is probably the appropriate drink for there, Tim.
Tim's really into the wine right now.
Cheese, he is the wine and, uh, yeah, but I mean, I, and like the, uh,
the club soda and gin or something.
And
Speaker 2: don't worry, Tim, I have gone directly from Coffee
to Bourbon in the same cup.
Oh yeah.
It's not, it's not a bad problem at all.
Sid: Tim.
I also learned in our trip that using the same ice cube for the second glass of
bourbon is very, uh, is a very good call.
I don't know.
Yeah.
Dirty ice.
That's what they were all saying.
Speaker 2: Uh, where were we?
We were talk, we were talking about that incentive plans doesn't have to be set.
Yeah.
That we could, we could start out with, you can totally start out with
catching people doing something right?
Yeah.
Catching people doing something right.
Sid: Man, that's such a lost leadership art of just saying thank you.
I've noticed.
Hey, you've done a really good job.
I wanted you to know it hasn't gone unnoticed.
Here's, here's, you know, here's 20 bucks.
Whatever.
Uh, I really appreciate it.
I know it's not, I know it's not a lot, but it's, but it's just a little
bit of a gratitude, you know, a little bit of a token of my gratitude and I
want you to know that I appreciate you.
What I mean, that's, that goes, it goes so far.
Speaker 2: The IRF, I don't know what that is, but Return, return on, no, the.
So the IRF is a,
Sid: oh no, I thought it was RIF.
Sorry,
Speaker 2: I'm dyslexic.
Oh, the Incentive Research Foundation.
Oh.
Found that non-cash incentive programs, if you start, it can
increase employee engagement by 31%.
So.
That's the problem.
I mean, or that's, that's the whole goal, I think, with your team members,
is to keep them engaged in the process.
Yeah.
Sid: Mm-hmm.
And really, I think you've gotta constantly break down the wall of
the idea that society puts out there.
Modern culture puts out there that it's the worker versus management, you know?
Speaker 2: Right.
Sid: Um, and it's not, it's not their fault that they think that way.
It just, that's just what the deal is, you know?
But if you can keep breaking that thing down by bridging gaps and having
incentives and catching people doing something right and genuinely caring,
then um, that starts to melt away.
And people, you, you build up a lot of leadership capital and
you can get a lot of stuff done.
Speaker 2: And I, I, I also think just some kind of
notice that you care.
Yeah.
Helps retention a ton.
Like just a ton.
Someone understanding, Hey, this guy cares about me.
Yeah.
This company cares about me
Sid: 100%.
And it doesn't take much.
And that goes, even if it's someone that, that needs to leave or is going
to leave your organization, if you treat them with respect and you don't take it
all personal, this person's leaving and you treat 'em with respect and think
about it that like, Hey, this person did a great job while they were here.
Um, when they started, we were here, and now that they're leaving, we're here.
We, when he started, we were there.
When he is leaving, we are here.
And, uh, it was a big, he was, this person was a big part of that.
And man, it's funny, just treating people right is the right thing
to do in a number of different ways, but it should also lead back.
You having a good pu uh, uh, uh, reputation as an employer.
And that's kind of what we're all trying to do.
Here's my take on, on, uh, being an employer, especially in the service
industry or no matter what your, um, no matter what your business is
in whatever industry that is, we're all, there's only a finite number
of people out there to do the job.
And so to a certain degree, we're all playing, we're all,
you know, SEC football coaches.
And we're all recruiting out of the same talent pool.
I'll be Nick Saban.
You do.
Look, you would win.
You would, you would win because that guy's the goat dude and he really, he's
one of the most impressive humans ever.
But back to this, um, I. We're all SEC football coaches, and whoever recruits
the best talent for the most part, wins.
Now you've gotta be able to develop that talent and get them all, um, singing outta
the same songbook and rowing in the same direction, uh, but getting the the right.
Horses on the team, or butts on the bus is, is the first step.
And then getting them all to buy into the process is the second step.
Getting them all to execute when it counts is the third.
So, you know, you, you gotta think of it that way and just
start at first principles.
And first principles is, I need talent.
And so how am I gonna do that?
Well, it's e everything.
It's everything.
It's, does your place look good?
Do you, uh, you know, do you have decent equipment?
Are you treating people right?
You know, do you have a well-written ad? All that stuff in the interview
process, are you asking good questions or are you being a jerk about it?
Like, oh, you're gonna have to earn it to work here.
You know, that kind of stuff.
And it's just an attitude.
And then onboarding, do you have a way that you're actually helping them onboard
so they feel like you've, you've given it some thought, you know, um, you've
actually thought about the first time you took a new job and thought, Ooh, there's.
Yeah, it's pretty nerve wracking.
You're a little bit, you got some anxiety going on there.
Do you ease that?
Do you get 'em engaged early?
Do you set 'em up with a mentor, uh, someone to walk 'em through the process?
Do you, do you spend enough time with them in the first, you know, 90 days
you as the president, are you checking in on 'em every couple of weeks and
making sure everything's going okay?
All of those things leaks out into the rest of the talent pool and starts.
Those are, those are, uh, as Chris Bell would put it, those are boomerangs
you're putting out and they're eventually gonna come back to you.
Then if you've got a good incentive program, it keeps everyone engaged
and it makes the leadership words you're putting out there not
ring so hollow and they actually.
Let them know that something's in it for them, not just, you know,
they think it's lining our pockets.
You know, I literally think, uh, before we started discussing our p and l and
all of our other financial data with our entire team, they probably thought I was
just taking wheelbarrow loads of cash home, which is absolutely not the truth.
So, gives you an opportunity to, to explain all of that
too, and, and you really.
Attract, hire and retain the best team members.
If, if, if you got a holistic approach.
Speaker 2: I think incentive planning.
I worked for a company one time, um, in the corporate space where, but
that was complicated where I was, um,
like salary plus.
Mm-hmm.
But I never knew.
What the Plus was.
Sid: Yeah.
Speaker 2: Like I never knew how to get to the plus.
Sid: Yeah.
It's, it's crazy how they make it all complicated.
So
Speaker 2: it wasn't clear.
It wasn't clear at all.
Sid: Yeah.
Speaker 2: And so it, it was very demotivating for me to ever try because I
was like, I, one month I'd hit it the next month I didn't and I had the same sales.
So I don't know.
Yeah.
Like what breaks up.
So I think you have to be very clear on what the incentive plan is.
Yeah.
What is the, what is the incentive?
And I think you have to make it available
to, for everyone
Sid: to know.
Yeah.
A ninth grader should be able to understand.
Right.
Your incentive for Yeah.
Speaker 2: If I do this and excel at this.
Yeah.
This happens.
Sid: Yeah.
Keep it simple.
Yeah.
It, it, it's like any other, it's like any other leadership.
Thing.
You know, any directive, you gotta keep it simple.
And the, and the, the more simple it is, the better it
Speaker 2: is.
Another thing I would do when I started my company is I would, I would speak in.
What ifs.
If we do this, then I'm gonna do this.
Oh.
And I think that's demotivating too.
When you are, when you start out early with your team members.
Okay.
Is speaking in the What if we do well this month?
I'm gonna make sure you get it.
Oh, so you weren't really define, it was fuzzy.
What well was, I think you, yeah, you gotta define what well is,
Sid: yeah.
Yeah, dude.
Implementing an incentive program is, is definitely going to make you get
crystal clear with your language and, and the outcome you're shooting for.
Definitely.
Speaker 2: Definitely.
So,
Sid: uh, if you've got a real salesperson, like a real one,
Speaker 2: yeah.
Sid: Uh, they may not.
Ask for clarity on that, uh, on that incentive program and
what the defined outcome is.
But they're shooting for what they think it is, and if you guys are not
aligned, you are going to get it, son.
They are going to be real aggressive about how you lied to them, you know?
Right.
Speaker 2: And if you're a team member listening to this episode.
Do not hesitate to ask for clarity.
Yeah, yeah.
Yeah.
Because one of the things that I would, I, I would do as a, as a leader is say,
oh, if we, if I'm gonna do this, when we hit this, well, I had a team member
one time say, what, what does that mean?
And it helped me.
It helped me clarify what I was promising.
Sid: Yeah.
Um, I'll also say if you're a team member, you're a business leader of a
department or just anything and you got someone trying to implement an incentive
program and it's messy and it's not going okay, let's have a little bit of grace.
'cause they're at least trying to do something they.
These things are tough, and everything sounds like a good idea, even on
paper until it starts to get executed and you didn't think about what, you
didn't think about all of my best ideas or all of my biggest mistakes.
I'm sorry.
All of my biggest mistakes started out as fantastic ideas.
I never had a bad idea.
I. They just turned out to be wrong.
You know?
So have a little bit of grace because at least people are trying and I'm
saying that to you, the listener, to uh, yeah, give yourself a little bit of
grace and maybe be a little bit, I. More brave and at least trying something.
And if you set your people up to say, Hey, I don't know that I've got this
fully, uh, a hundred percent dialed in, but I would like to try something.
'cause I wanna make sure that we're rowing in the right direction and I wanna make
sure that I'm putting my money where my mouth is, that uh, this is the difference
that's gonna make the difference.
And if we do these things, here's what I think I can do.
Let's try this for a little while and see if it works.
That's a real good approach to starting an incentive program.
Speaker 2: Yeah.
I think you have to look at the sustainability of it.
Yeah.
Can you sustain it?
Can this be sustained and a try?
I I don't think there's anything in the world wrong with a try.
Yeah.
Hey.
And, but be very clear about it.
Say, let's try this.
Sid: Well help you when you hire people, you put 'em on
a 90 day probationary period.
Right.
I mean, at least we do.
I, I think that's still a standard practice.
It is.
I haven't worked anywhere in a long, in long time.
I think it's, yeah.
Uh.
So even then we're just going, Hey, we're just giving this a shot.
You know, if it doesn't work out, doesn't make you a bad
person, just makes you a bad fit.
Um, and so trying that out is good, but I, I think we're segueing into
how, how to implement a system, um, in, in my, in, in broad, in a
broad scope, it needs to be win-win.
It, it can't be all one sided for the business owner or management, and it can't
be all one sided, uh, to the team member.
Um, so it needs to be balanced in that way.
It needs to be balanced in a way that it can't be manipulated either.
Let's do this, let's say that, um.
Let's say, let's say you've got sale a salesperson, right?
And you say, look, I'm going to give you, uh, 10% of every sale you make.
Well, let me tell you what you're gonna have.
If you've got a real, if you've got a real assassin out there.
A real sales badger, they're gonna sell everything and they won't
give a crap if it's good work.
Bad work in your area, not in your area, nothing.
Not because they're bad people, but they're just wired that way.
They see a goal, they're just going after it.
So they'll sell $2 million worth of shit you don't need, you know,
and you are on the hook to pay them whatever is that $20,000.
10.
Speaker 2: No, two.
2 million.
That's two.
That's 200,000,
Sid: 200,000 bucks.
Yeah.
That's a tough, that's a tough mistake.
If it's a bunch of, no, I'd never do 10%, but you get what I'm saying?
Yeah.
Unless they're all commissioned.
But yeah, we like
Speaker 2: easy math on this podcast.
Yeah.
10 percent's a good one,
Sid: so, but either way.
So it needs to be balanced where it can't be manipulated.
So it's just clarifying your language.
We'll pay 10% on everything that's sold, that is in our service area, that
meets our, uh, meets our whatever it is.
So we used to do hours, but hours can get funky on that thing.
Uh, but just meet our gross profit margin.
So it's work that gets done now.
You're gonna get, oh, it's not my fault.
They didn't do that.
And I was like, well, it's not my fault either.
It's not my fault that either, you know, I didn't, I you, you
sold it was the job bid, right?
Oh, I promise it was bid.
Right.
Okay.
Well I didn't get, you know, that kind of stuff.
You're still gonna have to deal with that, but you can work through it, but at least
it's balanced and at least, and, and you gotta, this is just a piece of advice.
You need to pay the commission when you get paid.
And they go, well, I don't wanna wait for it.
Well, what do you want me to do?
You want me to come outta my pocket?
I'm happy to do that.
But I thought we were a team here.
And so sometimes you gotta punch back or push back, I'm sorry, with, uh,
with, with aggressive salespeople.
And aggressive salespeople.
Do not put them down.
They're just wired that way.
And you need some badgers.
Definitely at least one.
Speaker 2: Yes,
Sid: you, you need them.
You need them, and they're, and you can't like, get mad at 'em, uh, every once in
a while and then love 'em when they're bringing, when they're making it rain.
So you just gotta understand that's who they are.
And, and it's okay.
You need a hard charger.
You do need some hard chargers, and you may never have one of
those, and that's okay too.
But I'm just giving you some advice that you better clean up your
language and make sure it's balanced and make sure you've explained it.
Three times, and I like to say, Hey, will you explain back to me what
you understand this thing to be?
In your own words.
That's a good one.
Would you mind explaining to me in your own words what you
see this incentive plan being?
Because then you get to hear what's running through their sales badger
head, which might still be, you're gonna pay me 10% on anything?
No, no, no.
For the fourth time, it's this.
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Speaker 2: Incentive plans also work to highlight a certain area
of product that you wanna grow.
Sid: Yeah.
Speaker 2: Yeah.
So putting an incentive plan on just a specific product
that you sell is fine too.
Sid: Yeah.
I love an area that you're trying to grow, putting everyone on it.
Just paying a, you know, a fee to everyone for that on top of
whatever thing you've got going on.
Right.
When it's, so, even more than sales, let's say you've got a, um, a department
manager and tires are a big issue.
You look, you, you know, in your analysis from last year, you spent.
A hundred thousand dollars on, on tires, that would be a lot of money.
But if we can get that down to 50,000 by implementing some, you
know, we're gonna put in this, uh, this liquid tube inside of every.
Uh, every tire, it's gonna be, you know, $800.
You're gonna put it in twice a year, and then you're gonna have someone
go through with a metal detector through the yard once a once a week
to get up any screws or nails, and now you're only spending 40,000.
You know, you spent.
You know, $1,600 on the, the liquid tube, and then one guy a week for an
hour is gonna go through and do that.
There's another $1,600 and you spent $1,600 on a, uh, metal detector, and
you dropped your, uh, your tire expense from a hundred thousand to 40,000.
That's a lot of money that you just saved for, you know, whatever that is.
Is that $4,800?
That's a lot.
I'd, I'd, I'd save 60,000 by spending 48 all day long.
And then you go ahead and pay that other, um, you know that department
manager that put it all together and made sure it got done, you know, you'd
probably go ahead and pay that person $5,000 or $4,000 or whatever it is.
Now.
They're gonna want, if you may, if you save $60,000, they're gonna want 30,000.
And I think that's ridiculous too.
That's just me.
Cost savings is a great place to put an incentive plan.
Yeah.
You know why cost savings is a great place.
You want me, you want me, you want me to do the math for you on that?
It's almost better than sales.
It is better than sales.
Yeah.
It's, it's, it's twice as good in, in our world it's twice as good.
I'll explain it.
So
sales, you sell a thousand dollars, what do you have?
At a and, and if you're do, you've gotta, you've gotta, you've gotta,
uh, you gotta go to the job.
You gotta sell the job, you gotta do the job and all that stuff.
And we're operating at a 50% gross profit for easy math.
Yeah.
That's 500 bucks.
So you got 500 bucks.
So did you, so if you sold a a thousand dollars job, did
you have a thousand dollars?
Nope.
Now, if you save a thousand dollars, what do you have?
A thousand dollars.
A thousand dollars?
Yep.
A thousand dollars.
It's doubling your money.
Every dollar you spend, every dollar you save is like, is like $2 of sales.
Now, every dollar you save in a department that is operating at 70% gross
profit is way more than uh, a dollar.
It's like $3.
It's crazy.
Now you cannot save yourself into profitability, but you can save
yourself into another tax bracket.
Speaker 2: Definitely you can do that.
You can't, holy
Sid: shit, that is tweetable.
Uh, Tim, you can't save yourself into profitability.
But if you're profitable and you start saving some money, you can save
yourself into another tax bracket.
That's how you make some real money is.
Looking at your p and l and saving $200,000 in expenses, variable overhead or
fixed overhead, or a combination of both.
'cause then you don't have to sell $450,000 worth of work.
You just do the same amount of work with the same amount of
hours, with the same uh, people.
You're just saving the expenses.
There we go.
So there's, there's our rant on incentive programs and, and as somo as that is,
you know, we didn't, I mean, Keith did bring in the Harvard Business Review.
I mean, this is just our experience with it.
Um, this is, this is like rubber meets the road, real nuts and bolts
experience with incentive programs.
Um, and so.
Uh, you know, I, I feel like it's, I feel like it's pretty good advice.
I, I, and, and I give this kind of advice all the time.
Uh.
Keith mentioned the guys in my peer group and, and we've, we've had
tons of discussions about this.
Why do you wanna do it?
You're, you're trying to get everyone rowing in the same direction and in
me, as the leader, I've gotta identify what are the areas that are gonna
make the biggest differences, and how do I keep people focused on that?
Then also, how do I line them up with what's in it for them, the
company and all of our futures?
When do I do that?
I do it when I've got some pretty good systems in place.
I know what success looks like and I probably have some help in implementing
and managing that process so I don't mess it up because if you start something, you
damn well better be able to be consistent with it or you're gonna lose all of
that, uh, leadership capital you, you built up over the last couple of years.
And then how do you set it up?
Um, it just needs to be win-win, so the company wins.
First, and then the team member wins.
And it's gotta be balanced where it can't be manipulated.
Um, and if you, you follow those three steps, I think
you're gonna be in good shape.
Keith, any final thoughts, questions, comments, concerns?
Speaker 2: The Harvard Business Review also said
Sid: he's been hanging out with scientists and, and, uh, all these people.
The
Speaker 2: number one downfall of any incentive plan is the follow through.
Sid: Mm-hmm.
Mm-hmm.
Speaker 2: So be sure that you can follow through.
It's so important with what you come up with.
Sid: It's so important to you.
Entrepreneurs talking, I'm talking to
Speaker 2: myself too.
Well, yeah, that's the, that's the number.
I think that's a, a big problem just in.
In new business anyway.
Yeah, just follow through.
Sid: Well, we start something 'cause we had an idea.
Speaker 2: Yeah.
Sid: And we got like struck with the, the bug and let's just go do it.
Speaker 2: Yep.
Sid: Same thing with incentive program.
Yeah.
It sounds like the right idea.
I see all the upsides, all the benefits.
I, I did not think about how I'm going to execute it and stay and,
and, and follow through with it.
That's why I'm always like, you gotta have someone.
Yeah, we're, we're implementing some, some new incentive plans.
And my first question is, cool.
Who's gonna do that?
Because everyone will come with you to an come with, come to you with an idea.
Man, I think we ought to do this.
Yeah, that's great.
Who's gonna do it?
Who's gonna manage it?
Oh, well I assumed you would.
Well, that's a terrible mistake.
Do you know me?
You know?
Yeah, yeah.
I'm, that's, no, I'm not doing that.
Let's, let's think, let's think a little bit deeper.
Who's gonna do that?
You know, who's really super organized on our team?
Okay.
Looks like it's gonna be Jamie.
Excellent.
Jamie, you got one more thing to do.
Speaker 2: Yeah.
I asked, I asked that w this week.
I had somebody come on my team and say, you should do.
I love it.
I love
Sid: the You should.
Yeah.
And I'm like.
Really, although you're pretty, you're pretty big on You should do this.
I like that.
Yeah.
I'm like, well, I've
Speaker 2: learned to turn it back.
Sid: Yeah.
Yeah.
Mm-hmm.
Speaker 2: So, oh, good times.
Let us know if you successfully, I hope we've not scared.
Scared you out.
No, you're doing great.
Implementing incentive.
They're great.
They're definitely good.
Yeah.
So let us know if you start one.
Yeah.
And let us know how it turns out.
Hey, you know who can help you with incentive plans?
Who's that?
Um, our sponsors.
Um, C two Wealth.
Oh, okay.
If you're at the stage where you need to add some real incentives
to your organization, they do that.
Like health benefits?
Health benefits, yeah.
Like some, you know, that is definitely an incentive.
Plan.
401k, that's definitely a set plan.
Your match, you gotta a term match.
A match, yeah.
Whatever they can help and you know who can help tell you if it's a good idea
for you to do it well, well, C two L can implement it, but then Johnny Barranco
can tell you if it's a good idea.
That's a good point.
And you're ready for it.
Sid: Yeah, that's a good point.
Yep.
He can definitely help.
Thanks everyone.
I'm out.
Yep.
Out.
Peace.